The article I have attached “Job Performance: Necessary – But Not Always Sufficient” takes it a step further in its thoughtful analysis of how to measure when to sack a top performer who has created a serious problem.

In my opinion we must always strive to improve upon what we have. Like I tell my children “Good enough never is!” As such we need to be vigilant in eradicating the ranks of our businesses of both the underperformers and those whose performance may be stellar but behavior crosses the line.

See the article in OPEN Fourm at job performance necessary but not always sufficient by Ken Ross.

This article was written by Gary Field, CPA at Numerico, PC. Click here to view Numerico’s website.

The most important provisions in a severance agreement are those regarding payment, non-competition, and the release of claims. In a severance agreement, the employee typically agrees to accept payment in exchange for agreeing to release employer from claims he or she may have against employer. It is also very typical for a severance agreement, like many employment agreements, to include a non-compete provision. An agreement not to compete should be reviewed for reasonableness, which will vary depending on the specifics of the situation.

It is recommended that employers offer the terminated employee a reasonable period of time to consider signing a severance agreement with a release. A release is unenforceable unless the employee voluntarily executes it, i.e., the execution is not the result of duress or coercion.

Employers should make sure to have legal counsel draft or review their severance agreement to ensure that the employer is adequately protected. Employees should consult legal counsel before signing a severance agreement to ensure that the agreement terms are fair and reasonable.

This article was written by Natalie C. Najarian, Associate at Demorest Law Firm.

If the employer does not follow standard eviction procedures, he or she could be liable for violating Michigan’s Anti-Lock Out Statute, which states that the wrongly evicted employee “shall be entitled to recover the amount of his actual damages or $200.00, whichever is greater, for each occurrence and, where possession has been lost, to recover possession.” In other words, the employer would be responsible for paying damages and giving the property back (at least until the correct eviction procedure has been followed).

To avoid this liability, the employer should provide the discharged or resigned employee with a notice to quit. If the former employee does not leave after the notice to quit is provided, then the next step is to file a complaint for possession of the premises in the local District Court.

1. IDENTIFICATION OF EMPLOYEES TO BE LAID OFF. The decision which employees are to be retained and which employees are to be laid off should be based on a variety of factors, including their skills, experience, job performance and tenure with the company.  At the same time, the lists of employees to be retained and to be laid off should be reviewed to make sure that the layoffs are not targeting or adversely affecting some protected group.

2. UNION. If some of the company’s employees are represented by a union, the company will have a duty to bargain with the union both about the decision to lay off employees and the effects of the layoff.

3. WARN ACT. The Worker Adjustment and Retraining Notification Act of 1988 (commonly referred to as WARN) generally applies when a business has 100 or more full-time employees, and lays off at least 50 people at a single site of employment over a 30-day period.  When WARN applies, the company must give the affected employees at least sixty (60) days prior written notice of their job loss.  The notice must provide specific information required by WARN.  There are three main exceptions to the 60-day notice requirement:  (a) the company is in financial trouble, is actively seeking new business or capital, and reasonably believes that an announcement of its planned job cutbacks could jeopardize the efforts to obtain capital or new business; (b) the plant closing or mass layoff was caused by business circumstances that were unforeseeable; or (c) the plant closing or mass layoff was the direct result of a natural  disaster.

4. COBRA. If a company has more than 20 employees, it must provide a COBRA notice to employees who lose their health insurance coverage as a result of job loss.    The affected employees and their dependents have the right to continue their health insurance for 18 months (or in some cases longer) at their own expense.  As part of the Obama administration’s economic stimulus package, a new subsidy is available to employees who lose their health insurance coverage as a result of a layoff.  The employees have to pay 35% of the cost of continuing their coverage.  The federal government pays the other 65% through tax credits to the employer.  (A separate article on page 2 deals with the new COBRA subsidy.)

5. FMLA. Employees on a leave of absence under the Family and Medical Leave Act (FMLA) are protected against a reduction in force unless it can be demonstrated that they would have lost their position even if the FMLA leave had not been taken.

6. SEVERANCE PACKAGE. No federal or state statute mandates that a severance package be given to an employee who is being laid off.  However, a company policy on severance pay could create an enforceable contract.  If an employer decides to give severance pay, then a Settlement Agreement and Release should be required as a condition of the payment.   In other words, in exchange for a voluntary payment of severance pay to the employee, the employer will be assured that it will not face litigation from the laid-off employee.

The severance agreement needs to contain certain specific language to be enforceable, particularly if the employee is 40 years of age or older.   The Older Workers Benefit Protection Act (OWBPA) requires certain provisions for the severance agreement to be enforceable.  It may also require that the affected employees be given information on the job title and ages of all employees being laid off, as well as the same information for the employees that are being retained.
The severance agreement should also allocate the severance pay to specific weeks, to reduce the company’s unemployment liability in connection with the layoff.

7. PENSION, 401(k) AND OTHER EMPLOYEE BENEFIT PLANS. These plans should be carefully reviewed to determine the rights of employees.  The layoff could affect their vesting or right to obtain distributions.

This is a complicated and risky area of the law.  You should consult legal counsel before any layoff decisions are made or implemented.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm. Click here to view his professional resume.